Empty Pockets? How to Pay Your Buyer’s Agent Commission

New rules changed how buyer’s real estate agents get paid. But homebuyers are finding workarounds to limit their out-of-pocket costs.

One of the biggest challenges homebuyers face is accumulating the cash they need for a down payment and closing costs. New rules around how real estate agent commissions get paid, introduced in August 2024, sent a chill around the housing market because of the fear that buyers would need to add yet another cost to their long list of expenses: paying their buyer’s agent fee. While that is a possibility, generally buyers are finding ways to avoid paying their agents out of pocket.

In the aftermath of a string of lawsuits that accused the National Association of Realtors and several real estate brokerages of forcing sellers to pay commissions to the agents hired by their buyers, the organizations settled the lawsuits. At the same time, new rules were instituted by the National Association of Realtors for their members.

Now, buyers must sign a written agreement with their agent that spells out the responsibilities on both sides and the agent’s fee. That fee can be a percentage of the sales price or a fee for services.

Sellers are not allowed to advertise any offer to pay a buyer’s agent on their local multiple listing service (MLS). However, sellers can offer compensation to the buyer’s agent during negotiations for the home purchase or even advertise that they are willing to offer closing cost assistance. That assistance can include paying the real estate agent commission.

Consumer advocates hoped that the new rules would bring much-needed transparency around how real estate agents get paid and give buyers more of a say in how much their agents earn.

The traditional system before the change was that sellers typically paid a commission from the sales proceeds at the closing table, which was then split between the two real estate agents and their brokers. The commissions were always negotiable. Typically, the total commissions paid came to 5% to 6% of the sales price, with about 2.5% to 3% going to each agent.

The hoped-for outcome that commissions would decline steeply hasn’t happened yet, more than six months after the new rules were implemented. A recent study by Redfin found that the average buyer’s agent commission was 2.37% in the fourth quarter of 2024, flat compared to the third quarter of 2024 and down slightly from 2.45% one year ago prior to the changes.

Redfin’s study found that buyer’s agent commissions actually increased slightly on more affordable homes priced under $500,000.

Opting in for a Real Estate Agent

Many housing industry experts worried that the new practices would disproportionately hurt first-time homebuyers and buyers from low-to-moderate income households who would find it difficult to come up with more cash to buy. So far, lending rules have remained unchanged: Real estate agent commissions cannot be financed into a mortgage.

One option that some buyers might consider is to buy a home without a real estate agent to represent their interests, but there’s no evidence that buyers are making that choice yet. Buyers' agents can be especially valuable to first-time buyers who lack experience in real estate transactions.

“Most buyers in my market agree to fully commit by signing an exclusive buyer agency agreement upfront,” says Patricia Arriaga, a real estate agent with eXp Realty based in Greensboro, N.C. “They understand the value we bring, especially when it comes to research, negotiations and strategic decision-making.”

An agent’s role extends far beyond just showing homes,” Arriaga says.

“I conduct in-depth market analysis, review property history, assess trends and evaluate factors like absorption rates and neighborhood growth to ensure buyers make informed decisions,” Arriaga says. “My expertise is critical when structuring an offer, negotiating inclusions and exclusions, coordinating inspections and ensuring a smooth transaction.”

When signing a buyer’s agent agreement, buyers can negotiate with their agent. The agent is responsible for explaining how the commission works and what their buyers must pay if the seller does not cover the fee.

“I typically outline my commission and the buyer’s maximum exposure if the seller does not cover the full amount,” Arriaga says. “This clarity helps ensure a smooth transaction without surprises.” 

6 Ways to Pay a Buyer’s Agent

While signing a contract commits buyers to making sure their agent is fully compensated for their work, that doesn’t necessarily mean that buyers pay their agent themselves.

Here are 6 scenarios for buyer’s agent payments:

1.   The seller pays all fees. In most of Arriaga’s transactions, the seller pays the listing brokerage and covers the buyer’s agent compensation fee. This mimics the tradition of sellers paying all commissions from the proceeds of the sale. However, the fees are separated now rather than split by the brokerage.
2.   The fees are split between the buyer and seller. Some buyers may pay the difference between what the seller covers and what they agreed to pay their agent, Arriaga says. “However, I haven’t encountered a seller unwilling to pay a buyer broker compensation,” she says. “If there is a shortfall, some buyers pay out of pocket, but it depends on the agent and the buyer’s financial situation. Some agents may also adjust their broker compensation structure if the seller is unwilling to pay.” For example, if the buyer’s agent agreement states that the agent will receive 3% of the sales price, it’s possible for the seller to pay 2% and the buyer to pay the other 1%.
3. Buyers pay with a closing cost credit. Rather than specifically paying a buyer’s agent fee, sellers can offer a lump sum closing cost credit that the buyers can use for any of their costs. “While this is an option, I rarely see buyers using their credit to pay commissions,” Arriaga says. “A closing cost credit is more often used to reduce overall purchasing costs.” 
4. The fee is paid with homebuyer assistance funds. Depending on the lender and the specific requirements of a homebuyer assistance program, the funds may be used to pay a buyer’s agent fee. “Most homeowner assistance funds are designated for down payments and closing costs rather than agent commissions,” Arriaga says. “I haven’t personally encountered a program that covers broker compensation, so I always advise buyers to check with their lender.”
5. The builder pays. When buying a new home with representation from a buyer’s agent, the builder typically pays the real estate agent’s fee. “I have never encountered a builder who refuses to pay the buyer broker's commission,” Arriaga says. “Builders rely on agents to bring buyers and help them move their properties.” 
6. The buyer pays cash. In some cases, a buyer will need to pay their agent directly. For example, some sellers may refuse to contribute to the buyer’s agent fee.

Creative Solutions to Paying a Buyer’s Agent

To maximize savings, Arriaga recommends that buyers assemble a team of professionals including a skilled lender, an experienced real estate agent, and trusted contractors for potential repairs who will work together to optimize the finances for the whole transaction. This can generate savings in other areas that can make it easier for a buyer to pay their agent if necessary.

“One key strategy is leveraging the lender’s ability to reduce costs in areas such as closing costs, origination fees, or other loan-related expenses,” Arriaga says. “A well-connected agent can coordinate with a lender who offers competitive loan programs or incentives, freeing up funds that the buyer might have otherwise spent elsewhere.”

An agent well-versed in down payment assistance programs can help buyers secure funds to cover a portion of their down payment, allowing them to reallocate personal savings toward other aspects of the transaction, she says.

“Beyond financing, a buyer’s agent brings significant savings by negotiating critical repairs or seller concessions prior to closing—often saving buyers thousands of dollars,” Arriaga says. “By taking a holistic approach—optimizing loan terms, minimizing upfront expenses, leveraging available assistance programs, and negotiating strategic savings—a skilled agent ensures buyers maximize their purchasing power while making the transaction as financially advantageous as possible.”

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